Equity Futures: Bearish bets mount in Nifty Bank after biggest crash
Monday, Mar 23
By Apoorva Choubey
out-of-the-money while all puts turned in-the-money for most expiries.
There were no strike prices available for levels below 17100, while the index fell 16.7% to 16917.65 points in the spot market.
Banks were among the worst hit in the market. Severe lockdowns announced by most states, and the expected economic fallout of the coronavirus pandemic has not only dimmed growth prospects of lenders but also worsened the outlook for asset quality.
Traders unwound long positions in the March futures, with open interest tanking 5%. They sold out-of-the-money calls and bought puts, in line with the bearish view for the index.
The March futures of several other banks were sold — Axis Bank, IndusInd Bank, HDFC Bank, State Bank of India, Bank of Baroda, Kotak Mahindra Bank and ICICI Bank in particular. These stocks closed 13-24% lower in the cash market.
Among others, the futures of metal, automobile and consumer discretionary companies were sold while a few pharmaceuticals were bought.
Traders unwound long positions in the March futures of the Nifty 50 too, with a 7% drop in open interest to 13.4 mln. The contract provisionally closed at a discount of 30.15 points to the spot.
The Nifty 50 ended at 7610.25, down 1135.20 or 13% from the previous close.
The index’s call options were sold, while puts were bought. Highest open interest is at the 9000 strike price call option, and the 7000 strike price put option.
–Nifty 50 Mar ended at 7580.10; down 1143 points
–Nifty 50 Apr ended at 7613.50; down 1140.90 points; 3.25-point premium to spot
–Nifty 50 May ended at 7611.45; down 1149.05 points; 1.20-point premium to spot
The total turnover in the futures and options segment of the National Stock Exchange fell to 4.17 trln rupees from 6.8 trln rupees on Friday.
In the index options segment, the turnover declined to 3.13 trln rupees from 5.15 trln rupees in the previous session. The total premium turnover of the index and stock options fell to 100.10 bln rupees from 128.3 bln rupees.
Futures and options contracts of State Bank of India, Reliance Industries, HDFC Bank, ICICI Bank, Bajaj Finance, Bharti Airtel, Housing Development Finance Corp, Hindustan Unilever, Axis Bank, Tata Consultancy Services, Infosys, Kotak Mahindra Bank, and ITC were among the most actively traded. End
Edited by Vandana Hingorani
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